Grain Farmers of Ontario analyst Marty Hibbs says the U-S corn markets are still entrenched in a downturn.
In this week's market commentary, Hibbs sees downside support at the 3.50 level for the September contract with major support at the 3.20 level.
The commentary sugggests we are once again approaching the all-important 9 dollar level for soybeans, and cold see more of the same.
Hibbs predicts a close below 9 dollars would confirm more pain as the next major suport appears to be about a dollar lower on the lead month contract.
He's calling for major support at the 9 dollar level and major resistance at the 10.60 level, based on the lead month.
GFO has all three soybean chart indicators negative.
The short term chart indicators for wheat are neutral, but the main trend is still down.
Hibbs says the weekly charts are showing signs of good support around the 4.60 level with short-term overhead resistance at 5.50 on the September contract.
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Grain Farmers of Ontario Weekly Market Commentary:
Corn The United States Department of Agriculture (USDA) released its monthly WASDE report on August 12 and the results sent most of the grains reeling. Corn yields were increased two bushels per acre from 166.8 from the July report to 168.8. The report also indicated a carryout of 1.713 billion bushels compared to 1.599 billion bushels in the July report.
On the charts: Following up from last week’s comments, we quickly filled the gap at $3.90 and immediately fell back to the $3.50 level within two days. We have an expanding wave count that appears as a possible precursor of a trend reversal. This will only be apparent once the dust has settled and, if it works, we will see the results in a couple of weeks once this report date can be identified as a bottom area. For now, we have to respect the charts and realize that the U.S. markets are still entrenched in a downtrend. On the downside, support is seen at the $3.50 level on the September corn contract, with major support at the $3.20 area.
Soybeans The USDA report showed a surprise for the soybean crop as well. The carryout was pegged at 0.47 billion bushels up sharply from the July number of 0.425 billion.
On the charts: Once again, our recommendation was to sell above the $10 level based on the September contract. We reached $10.10 on the futures and reversed sharply before the report today ( August 12) which pushed the contract another 60 cents to the downside. We are once again approaching the all- important $9 level. From here we may see more of the same. A range-bound trade between $9.00 and $10.50 once again. A close below $9 would confirm more pain as the next major support appears to be about a dollar lower on the lead month contract. Major support is still seen at the $9 level and major resistance at the $10.60 based on the lead month. All three indicators are still negative.
Wheat USDA's Crop Production report estimated total wheat production at 2.14 billion bushels. Of that, spring wheat accounts for 621 million bushels with a national average yield of 47 bushels per acre. Winter wheat production is seen at 1.44 billion bushels with an average yield of 44.1 bushels per acre
On the charts: Unlike corn and soybeans, the September wheat contract faired a little better as the futures closed down 15 cents after the report and managed to hover around that $5 area for most of the session. With today’s drop we also ran stops below the last pivot of $4.88 made on June 19. With harvest in full swing and even completed in the Midwest, we could still see a re-test of the old lows around $4.60.
The weekly charts are showing signs of good support levels around the $4.60. Short term overhead resistance is seen at the $5.50 area on the September contract while major resistance is seen at $6.00. Support is around $5 and again at $4.60. Short term indicators are neutral but the main trend is still down.
by Marty Hibbs
